Decision tree

Answer these simple questions to find out which scheme is best for you and your family

What you need to know before you start...

As a family you can only be in one scheme - Tax-Free Childcare (TFC) or Childcare Vouchers

If you join the TFC scheme you can't switch to Childcare Vouchers at a later date, but you can switch from Childcare Vouchers to TFC at any time (even after the Childcare Voucher scheme has closed to new entrants)

Both schemes explained in very simplistic terms:

Childcare Vouchers

The Childcare Voucher scheme (through your employer*) will remain open to new entrants until October 2018.

After October 2018, you won’t be able to sign up to a Childcare Voucher scheme, and TFC will be your only option.

If you already take Childcare Vouchers, you will be able to continue taking them after October 2018.


How it works

  • 32% ‘discount’ (basic-rate tax payer) - The value of the voucher is taken from your salary, before tax and National Insurance (NI) is deducted. So a basic-rate tax payer can save up to £933 a year in tax and NI (£1,866 for a family)
  • One account per parent
  • Can use the account for any child = more flexibility, easier to manage
  • You can set up an account as soon as your child is born
  • You can apply for Childcare Vouchers online or by telephone. You’ll need a recent payslip to hand
* If your employer doesn't currently offer a Childcare Voucher scheme as an employee benefit, please get in touch and we'll contact them for you.

The new Tax-Free Childcare (TFC) scheme is an alternative to childcare vouchers.


How it works

  • 20% ‘discount’ - For every £8 paid into a childcare account, the government will pay in an extra £2, up to a maximum £2,000 per child
  • One account per child
  • Can only use account for that child so need to understand childcare costs per child and ensure right amount of money is placed in each account = more restrictive, more difficult to manage
  • You can set up an account as soon as your child is born
  • To apply online for TFC you will need your Child Benefit (CHB) number to confirm the identity of your child (or your child’s original birth or adoption certificate). You (and your partner, if you have one) will also need information from your passport and driving licence to confirm your own identity. Make sure you also have a recent payslip to hand
  • You have to meet lots of eligibility criteria for TFC application to be successful, and have to self-assess eligibility every 3 months

By continuing to use this decision tree, you understand that it is purely for guidance only, to try and help you understand which scheme is best for you and your family. You’re aware that many other factors could also influence your final decision – this is just the first step in your journey